Some millennials are rethinking their retirement plans due to uncertainty related to climate change, a new study by the University of Arizona has found.
The study, which was published in the Journal of Family and Economic Issues, interviewed 50 millennials, aged between 26 and 41, about their perceptions, behaviours and emotions around financial planning in the context of climate change.
Preparing for the future
“Millennials are the first generation to reach retirement-savings-age amid the climate crisis,” commented lead study author Marissa Hettinger, a graduate student studying human development and family science in the Norton School of Human Ecology in the U of A College of Agriculture, Life and Environmental Sciences.
“As a millennial myself, I was interested in understanding how we think about preparing for the future and how climate change impacts our choices. When our parents and the generations before them set up their 401k and Roth IRAs, they weren’t necessarily thinking about the impacts of climate change when they reach retirement age.”
Hopes and fears
As the study found, participants expressed both fear and hope when discussing their future retirement plans, with many imagining worsening climate conditions, leading to hesitation or apathy about financial investments.
Others imagined futures shaped by sustainability, proactive government action and community initiatives, in turn aligning their investment strategies with their more optimistic outlook.
Parenthood, in turn, was also cited as a significant factor shaping how millennials approach financial planning in the context of climate change. Having children intensified concerns about climate change and strengthened the desire to invest in a sustainable future, the study found.
Elsewhere, participants shared the approaches they would be willing to take, including prioritising investments in sustainable funds, supporting local climate resilience projects, and advocating for better guidance from financial advisors and policymakers.
Proactive strategies
“We expected there to be a group of people who see climate change as a reason to save more, while others want to use their resources now and enjoy life,” Sabrina Helm, PetsMart Endowed Chair of Retailing and Consumer Science and associate professor of retailing and consumer science, added. “But I was happy to see proactive coping strategies in their savings behaviour.
“We are generally more concerned about millennials, because they tend to have lower retirement savings than other generations before them. Financial literacy, particularly among younger people, is comparatively low.” Read more here.
